David Howard knows Americans love bacon. He spent years developing a system that would make precooked strips of pork belly offering the flavor, texture and appearance of the freshly cooked version.
But a joint-development agreement with Hormel Foods Corp. that began in 2007 went bad, leading Howard to pursue a multifront legal assault seeking to regain control.
This week, Howard, president of Dallas-based HIP Inc., sued Hormel in Delaware federal court, saying it infringed a patent for a hybrid bacon cooking system. Howard is the sole inventor and wants an order transferring ownership of the patent -- which also was issued May 29 -- to him, according to the complaint.
Bacon is big business. The U.S. pork bacon market was $3.3 billion for the 52 weeks ended April 28, according to National Pork Board figures compiled by Nielsen Research. That’s up from $3.1 billion a year earlier.
Cooked pork bacon sales accounted for $307 million of that, about 9.2 percent of the overall market, compared with 10 percent a year earlier.
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HIP is seeking royalties and a court order blocking further infringement by Hormel over the company’s Bacon 1 product. Hormel, in its 2016 annual report, attributed a 6 percent growth in sales of refrigerated foods in part to "innovative items," such as Bacon 1.
Howard declined to comment, citing the litigation.
"Hormel Foods disagrees with HIP’s allegations, and intends to vigorously defend itself in this matter and protect its intellectual property rights for the hybrid process," the company said in a statement.
In an August 2017 filing, Jim Snee, Hormel’s chief executive officer, said the company had committed more than $130 million to expand production capacity for precooked bacon at its facility in Wichita, Kansas.
"The demand for bacon, especially Hormel Bacon 1 fully cooked bacon, has been incredible," Snee said.
Howard’s work on making bacon easier to prepare began long before his fight with Austin, Minnesota-based Hormel. A series of catastrophic fires in bacon-cooking facilities prompted him in 1989 to develop a system in the U.K. for cooking slices in a linear convection oven in an environment that included superheated steam.
Steam Heat
That system, adopted by two major producers in the U.K., wouldn’t have transferred well to the American market. So in 1994, Howard conceived what would become known as the Unitherm Process -- cooking sliced bacon in a superheated steam environment in a spiral oven.
In 2004, he developed a version of process that included use of a microwave oven to preheat the bacon. In all, Howard has been granted 18 U.S. patents for various cooking and heating processes, systems and ovens.
When Howard approached Hormel in June 2007 to gauge interest, the company’s reaction was that the "opportunity to get ahead of the competition is to jump on this immediately," according to the complaint.
In 2014, Howard sued in federal court in Minnesota for breach of contract, saying Hormel took credit for his idea. The judge in September 2016 dismissed the parties’ claims and counterclaims and an appeals court affirmed the ruling. This April, he filed a complaint in Delaware, alleging Hormel infringed a patent for the process.
The case is HIP Inc. v. Hormel Foods Corp., 18-cv-802, U.S. District Court, Delaware (Wilmington).
--With assistance from Lydia Mulvany.
To contact the reporter on this story: Christopher Yasiejko in Wilmington, Delaware, at cyasiejko1@bloomberg.net
To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, Paul Cox, Joe Schneider
©2018 Bloomberg L.P.
